In 1922, Henry Ford famously said his customers could buy a car painted in any color they want “so long as it is black.” That sentiment perfectly captures the marketing thinking of that period—a time when businesses held the position of power over the customer.
Today, that line of thinking isn’t just outdated—it’s also dangerous. The customer is firmly in charge, thanks to a confluence of social, mobile and cloud technologies. And as many business leaders are learning, the empowered customer won’t hesitate to abandon brands that refuse to listen and engage.
“The customer has become the North Star of company strategy and operational design,” wrote Victor Milligan, CMO at Forrester Research, in a recent Ad Age article. “CMOs across industries and geographies are making hard changes to ensure that their own teams and their own operations are customer-obsessed. This transition is hard—but it is the winning hand in thriving in the Age of the Customer.”
Today, companies need to be customer-obsessed in order to survive. Brands that don’t focus on the customer are at risk of becoming obsolete fast.
How we got to the Age of the Empowered Customer
Until recently, companies haven’t realized the need to listen to customers. In fact, the first major business era—from the 1800s (beginning with the Industrial Revolution) to the 1920s, known to marketers as the production-oriented era—was singularly focused on how technology could be used to obtain economies of scale during a time when industry, as we know it today, was still in its infancy. During the production era, companies operated under the assumption they could offer a product that they were best at manufacturing (e.g. a Ford vehicle), and that customers would flock. There was no consideration for differences in customer taste, perceptions of value or diversification.
By the 1920s and until the 1950s, production efficiencies were realized, and emphasis began to shift away from mass production as a means of selling to persuasion efforts. The sales-oriented era was characterized by more customer-focused promotional efforts. This era saw the advent of personal selling, print and TV advertising campaigns.
The third and fourth eras—known as the marketing- and value-based marketing eras—saw a revolution in how both customers and businesses exist, interact, and operate in the marketplace. Instead of a singular focus on sales volumes and profit maximization, these periods started to highlight the importance of building meaningful customer relationships as a means of achieving sustainable and scalable businesses.
During the marketing era, which spanned from the 1950s to the 1990s, customers were increasingly placed at the center of a business’ operations—primarily as a component of the marketing mix. Concerns regarding customers’ needs and how to best meet those needs became the focus of business decisions, shifting emphasis away from production capabilities or sales efforts, towards more outward focused insights. This period began a fundamental shift in perspective not only within business organizations, but also in the broader understanding of how the customer landscape impacts a business’ success in the marketplace.
How to be customer-centric in the Age of the Empowered Customer
Today, companies achieve true competitive differentiation by delivering customer value—something that they could achieve only by engaging in continuous dialogue with customers. While many claim to be customer-centric, the reality is that these efforts often fall short. Engaging with customers, not just through one-off feedback surveys or social media monitoring, will ensure successful navigation of the rapidly changing marketplace.
Companies need to keep a pulse on customers, and it’s important to do so in a real-time, continuous and interactive setting. Creating insight communities—groups of thousands of customers keen on conversing about and with a brand—offers an important tool to help organizations make confident business decisions.
The needs, wants and desires of your customers are neither static nor discrete. Neither should be your approach to customer insight. By bringing your customers into the fold, you can give them a platform to get heard. Engagement is the key to creating a true sense of customer-centricity, as well as the value-based marketing many organizations strive to achieve.